Commercial Credit posts 90% growth in deposit base during FY 2012-13
Tuesday, 3 September 2013 00:00
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Commercial Credit and Finance PLC, one of Sri Lanka’s leading financial service organisations announced a growth of 90% of its deposit base during the financial year ended 31 March 2013. The company’s total assets also expanded by 79% during the year under review.
“Our gross interest income grew by 62.3% to Rs. 4.0 billion. However, due to the increase in interest expenses during the year, net interest income grew by 38.2%, i.e. to Rs. 2.4 billion,” stated CEO of Commercial Credit Roshan Egodage in the Annual Report of the company released recently together with its audited financial statements ahead of its 30th Annual General Meeting scheduled for 30 August 2013.
He went on to state that the net profit of the company (PAT) was 3.6% above the prior year at Rs. 679.4 million. Putting these figures in context, the PAT for 2010/11 stood at Rs. 60.1 million while the figure for 2009/10 was Rs. 45.2 million. “We are confident that in the coming years all of Commercial Credit’s service locations will contribute positively towards the profitability of the company,” added Egodage.
Commercial Credit Chairman Cecil Perera announced that the company had expanded its service network substantially to reach all districts of the country. “With this extended service network, Commercial Credit is well positioned to further develop its business activities. The success of any organisation is founded on the trust and confidence of its customers and we believe that this is particularly so in the case of our Company as we are in the financial services industry.”
The debenture issue of the company, amounting to a total of Rs. 500 million was the first listed debenture to be offered under the new tax regulations where interest income earned from such debentures would be exempt from withholding tax and income tax. CEO Roshan Egodage said: “We are pleased at the interest shown by the public in the issue, as it was not only the initial issue but the optional number of debentures was also taken up.”
“Further, during the year under review shareholders had the benefit of a capitalisation of reserves where new shares were issued on the basis of 1 for 10.9 shares held as at 27 March 2013. However, despite the company’s income growing significantly, cost increases related to its branch network expansion and increased cost of borrowing resulted in a slow growth of profits,” the Chairman said.
He went on to say that with Sri Lanka improving its macro-economic fundamentals and the aspiring growth plan of reaching per capita income of US$ 4,000 by 2016 well on track, financial institutions such as Commercial Credit that are characterised by innovation, speedy growth and expansion would be presented with many opportunities for further growth.
The company introduced several new financial products such as advance loans, Abiwurdi loans and housing loans, particularly for micro finance customers. There’s also the ‘Peya-King Mudal’ loan scheme for all customers. A financial product based on the principles of Islamic Finance was also introduced under the micro finance umbrella. The Hari Minor Savings Account was introduced with the intention of promoting the savings habit among children.
Commercial Credit hopes to continue to introduce new offerings to the market, thereby enhancing value delivered through innovation.
“I am pleased to note that most of our newly-introduced products, which were mainly presented to the market towards the end of the financial year under review, have been well received and hold much potential to be realised,” said CEO Egodage.
“Furthermore, in continuing to be firmly committed towards contributing positively for the greater good of society and being commercially focused and sustainable, Commercial Credit undertook several CSR initiatives during the year leading with the Monaragala Model Farm project, Govi Raja Govi Bima. We believe that these initiatives will have a truly positive impact on the community,” he added.
Commercial Credit was recognised as the Service Brand of the Year – 2012 (Gold Award) by the Sri Lanka Institute of Marketing (SLIM). This is the first time in the history of SLIM Brand Excellence that a finance company was recognised in this manner. The company also received the Local Brand of the Year (Bronze Award).
In addition Commercial Credit was presented with the top award in recognition of Brand Excellence in the Banking and Financial Services Industry at the 2012 Global Awards for Brand Excellence presented by World Brand Congress, USA. The company was also placed among the Top 100 brands in Sri Lanka in the fourth edition of the Brands Annual published by LMD.
